Two Dubai-based companies and several individuals were recently charged in an unsealed indictment in the District of Maryland for their role in a multimillion-dollar scheme to export non-organic grain to the U.S. Sold as certified organic grain.
Dubai-based Hakan Agro DMCC and Hakan Organics DMCC, as well as Goksal Beyaz, Nuray Beyaz and Mustafa Cakiroglu from Turkey, are charged with conspiracy, smuggling and wire fraud. Hakan Agro and Hakan Organics debuted on January 5 in the Maryland District.
The indictment alleges that between November 2015 and May 2017, the defendants implemented a scheme in which Hakan Agro, Hakan Organics and affiliates purchased non-organic soybeans and corn from Eastern Europe and shipped them to the U.S. as “organic”
This arrangement enabled the defendants to charge the higher prices associated with organic grains. Organic grains are typically 50% more expensive than conventional (i.e. non-organic) grains.
Among other things, the indictment alleges the following wrongdoings:
In late 2015, defendants purchased non-organic, non-GMO soybeans from Ukraine at a price of $423 per ton. Defendants then arranged for the same soybeans to be shipped to Baltimore, Maryland, where they were sold as “organic soybeans” at a price of $614 per ton, for a total value of more than $4.9 million.
In early 2016, the defendants arranged to purchase non-organic corn at a price of $168 per ton and ship it to Constanta, Romania. At the same time, they arranged to sell the same corn from Constanta to Baltimore as “organic corn” at $247/metric ton. Bills for the mislabeled corn totaled more than $3.3 million.
In late 2016, defendants shipped 16,250 tons of non-organic soybeans falsely labelled “organic” from Turkey to the U.S. and sold them for more than $10 million
In early 2017, the defendants arranged for the shipment of 21,000 tons of non-organic corn to the United States and falsely labelled it as organic. Mislabeled corn bills totalled more than $6.7 million.
In early 2017, the defendants arranged to have a shipment of non-organic soybeans shipped from Turkey to Baltimore and pass them off as “organic” soybeans.
Wire fraud and smuggling carry a maximum penalty of 20 years in prison. Conspiracy carries a maximum penalty of five years in prison. After sentencing, a federal district court judge will determine each defendant’s sentence after considering U.S. sentencing guidelines and other legal factors.
USDA’s Office of the Inspector General to investigate the case
Lead trial attorney Adam Cullman of the Environmental Crimes Division of the Department of Environment and Natural Resources and Assistant U.S. Attorney LaRai Everett for the District of Maryland are prosecuting the case.
Allegations are just allegations. All defendants are presumed innocent until proven guilty in court.
